Shares of Cencora (COR) have been strong performers lately, with the stock up 11.2% over the past month. The stock hit a new 52-week high of $309.35 in the previous session. Cencora has gained 35.6% since the start of the year compared to the -4.8% move for the Zacks Medical sector and the -1.3% return for the Zacks Medical Services industry.

What's Driving the Outperformance?

The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 7, 2025, Cencora reported EPS of $4.42 versus consensus estimate of $4.08 while it beat the consensus revenue estimate by 0.85%.

For the current fiscal year, Cencora is expected to post earnings of $15.37 per share on $317.7 billion in revenues. This represents a 11.7% change in EPS on an 8.08% change in revenues. For the next fiscal year, the company is expected to earn $16.96 per share on $340.9 billion in revenues. This represents a year-over-year change of 10.33% and 7.3%, respectively.

Valuation Metrics

Cencora may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.

On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

Cencora has a Value Score of B. The stock's Growth and Momentum Scores are C and D, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 19.8X current fiscal year EPS estimates, which is a premium to the peer industry average of 17.6X. On a trailing cash flow basis, the stock currently trades at 15.3X versus its peer group's average of 10.4X. Additionally, the stock has a PEG ratio of 1.63. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Cencora currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.

Story Continues

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Cencora fits the bill. Thus, it seems as though Cencora shares could still be poised for more gains ahead.

How Does COR Stack Up to the Competition?

Shares of COR have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Pediatrix Medical Group, Inc. (MD). MD has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of D.

Earnings were strong last quarter. Pediatrix Medical Group, Inc. beat our consensus estimate by 32%, and for the current fiscal year, MD is expected to post earnings of $1.55 per share on revenue of $1.88 billion.

Shares of Pediatrix Medical Group, Inc. have gained 1.8% over the past month, and currently trade at a forward P/E of 9.29X and a P/CF of 8.14X.

The Medical Services industry is in the top 22% of all the industries we have in our universe, so it looks like there are some nice tailwinds for COR and MD, even beyond their own solid fundamental situation.

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This article originally published on Zacks Investment Research (zacks.com).

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